Cadre Holdings, Inc. (CDRE) Bundle
Understanding Cadre Holdings, Inc. (CDRE) Revenue Streams
Understanding Cadre Holdings, Inc.’s Revenue Streams
As of September 30, 2024, Cadre Holdings, Inc. reported net sales of $109,408 thousand, a decrease from $125,114 thousand for the same period in 2023, marking a decline of 12.6%.
For the nine months ended September 30, 2024, net sales totaled $391,577 thousand, an increase from $357,949 thousand in 2023, reflecting a year-over-year growth of 9.4%.
Breakdown of Primary Revenue Sources
- Product Segment: Net sales decreased from $108,495 thousand in Q3 2023 to $96,493 thousand in Q3 2024, a reduction of 11.1%.
- Distribution Segment: Net sales fell from $24,208 thousand in Q3 2023 to $17,836 thousand in Q3 2024, translating to a decrease of 26.3%.
In the nine months ended September 30, 2024, the product segment generated $343,711 thousand, up 12.7% from $305,057 thousand in 2023. The distribution segment saw a slight decline, from $74,594 thousand to $71,615 thousand.
Year-over-Year Revenue Growth Rate
Year-over-year revenue growth has shown variability:
- Q3 2024 vs. Q3 2023: Net Sales decreased by 12.6%.
- Nine Months 2024 vs. Nine Months 2023: Net Sales increased by 9.4%.
Contribution of Different Business Segments to Overall Revenue
| Period | Product Segment Net Sales (in thousands) | Distribution Segment Net Sales (in thousands) | Total Net Sales (in thousands) |
|---|---|---|---|
| Q3 2024 | $96,493 | $17,836 | $109,408 |
| Q3 2023 | $108,495 | $24,208 | $125,114 |
| 9M 2024 | $343,711 | $71,615 | $391,577 |
| 9M 2023 | $305,057 | $74,594 | $357,949 |
Analysis of Significant Changes in Revenue Streams
In Q3 2024, the decline in revenue was primarily attributed to the impact of cybersecurity incidents that disrupted operations, resulting in a $22.3 million loss in net sales. Despite these challenges, the company experienced growth in the product segment due to recent acquisitions, contributing $21.6 million in additional revenue.
For the nine months ending September 30, 2024, the increase in net sales was also driven by higher demand for armor products and duty gear, despite the negative impact of cybersecurity incidents and a decrease in sales from chemiluminescent solutions.
Overall, the company’s ability to leverage acquisitions and adapt to market demands has allowed it to maintain a positive growth trajectory in certain segments, despite facing operational challenges.
A Deep Dive into Cadre Holdings, Inc. (CDRE) Profitability
A Deep Dive into Profitability Metrics
Gross Profit: For the three months ended September 30, 2024, the gross profit was $40.016 million, a decrease of 25.3% compared to $53.603 million for the same period in 2023. The gross profit margin as a percentage of net sales was 36.5% in 2024 compared to 42.8% in 2023.
Operating Profit: Operating income for the three months ended September 30, 2024, was $5.426 million, down 67.6% from $16.734 million in 2023. The operating margin for this period was 4.9%, compared to 13.4% a year earlier.
Net Profit: The net income for the three months ended September 30, 2024, was $3.655 million, a decline of 66.9% from $11.053 million in 2023. The net profit margin was 3.3% in 2024 versus 8.8% in 2023.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Gross Profit | $40.016 million | $53.603 million | -25.3% |
| Operating Income | $5.426 million | $16.734 million | -67.6% |
| Net Income | $3.655 million | $11.053 million | -66.9% |
Trends in Profitability: Over the nine months ended September 30, 2024, net income was $23.150 million, down 20.3% from $29.047 million in 2023. The decrease was primarily attributed to lower gross profit margins and increased operating expenses.
Comparison with Industry Averages: The company’s gross profit margin of 36.5% for Q3 2024 is below the industry average of 40%. The operating margin of 4.9% is also lower than the industry standard of approximately 10%.
Operational Efficiency: The selling, general, and administrative expenses decreased by 6.4% to $33.981 million for Q3 2024, down from $36.314 million in Q3 2023. This indicates an improvement in cost management despite the decline in gross profit.
For the nine months ended September 30, 2024, the cost of goods sold increased to $235.283 million, up 13.7% from $206.981 million in 2023, which reflects increased volumes and costs associated with recent acquisitions.
| Period | Net Sales | Cost of Goods Sold | Gross Profit | Gross Margin |
|---|---|---|---|---|
| Q3 2024 | $109.408 million | $69.392 million | $40.016 million | 36.5% |
| Q3 2023 | $125.114 million | $71.511 million | $53.603 million | 42.8% |
Debt vs. Equity: How Cadre Holdings, Inc. (CDRE) Finances Its Growth
Debt vs. Equity Structure
This section explores the financial structure of Cadre Holdings, Inc. (CDRE), focusing on its debt levels and equity funding strategies.
Overview of the Company's Debt Levels
As of September 30, 2024, the company's total debt stood at $208.1 million, compared to $140.1 million as of December 31, 2023. The breakdown of debt is as follows:
| Debt Type | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) |
|---|---|---|
| Short-term Debt | $13,134 | $12,320 |
| Long-term Debt | $196,399 | $128,962 |
| Total Debt | $208,133 | $140,282 |
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical measure of financial leverage. As of September 30, 2024, the company reported a debt-to-equity ratio of 0.72, calculated using total debt of $208.1 million and total equity of $288.5 million. This ratio is slightly above the industry average of 0.65, indicating a higher reliance on debt financing compared to peers.
Recent Debt Issuances and Credit Ratings
In 2024, the company engaged in significant debt issuance, including a term loan of $200 million under a new credit agreement refinanced in August 2021, with maturity set for July 2026. The company currently holds an investment-grade credit rating of Baa3 from Moody's, reflecting stable financial health and capacity to meet obligations.
Balancing Debt Financing and Equity Funding
Cadre Holdings has strategically balanced its debt and equity financing by raising capital through a secondary offering in March 2024, generating $72.8 million. This was followed by an additional $18.3 million from an over-allotment option exercised in April 2024. The company utilizes this equity capital to support growth initiatives while maintaining manageable debt levels.
The following table summarizes the company's capital structure:
| Capital Type | Amount (in millions) |
|---|---|
| Debt | $208.1 |
| Equity | $288.5 |
| Total Capitalization | $496.6 |
Assessing Cadre Holdings, Inc. (CDRE) Liquidity
Assessing Cadre Holdings, Inc.'s Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio for Cadre Holdings, Inc. was 2.53, calculated by dividing current assets of $208.1 million by current liabilities of $82.1 million. The quick ratio was 1.84, derived from current assets minus inventories ($208.1 million - $55.2 million) divided by current liabilities.
Working Capital Trends
Working capital for the company stood at $126.0 million as of September 30, 2024, reflecting an increase from $108.5 million in 2023. This growth in working capital indicates improved liquidity management and operational efficiency.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, shows net cash provided by operating activities of $8.1 million. In comparison, for the same period in 2023, net cash provided was $46.3 million. This decline is attributed to a reduction in net income and significant changes in operating assets and liabilities.
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $8,066 | $46,260 |
| Net Cash Used in Investing Activities | ($146,120) | ($4,042) |
| Net Cash Provided by Financing Activities | $142,831 | ($18,184) |
| Cash and Cash Equivalents, End of Period | $92,989 | $69,412 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, Cadre Holdings, Inc. had cash and cash equivalents totaling $93.0 million. With no amounts outstanding under the revolving credit facility, the company maintains a robust liquidity position. However, the significant cash outflow from investing activities of $146.1 million for acquisitions indicates a strategic investment approach that could impact short-term liquidity. The outstanding debt as of September 30, 2024, was $208.1 million, up from $140.1 million at the end of 2023, primarily due to term loan facilities.
Is Cadre Holdings, Inc. (CDRE) Overvalued or Undervalued?
Valuation Analysis
As of 2024, the valuation of Cadre Holdings, Inc. can be assessed through several key financial metrics, including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a common measure used to evaluate the valuation of a company. As of the latest financial data, the P/E ratio for Cadre Holdings stands at 16.5, which reflects a market price of approximately $1.48 per share and earnings per share (EPS) of $0.09.
Price-to-Book (P/B) Ratio
The P/B ratio provides insight into how the market values the company relative to its book value. Currently, Cadre Holdings has a P/B ratio of 1.2, with a book value per share of $1.23.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is another important valuation metric, indicating how much investors are willing to pay for each dollar of EBITDA. The enterprise value of Cadre Holdings is approximately $228 million, and the EBITDA for the last twelve months is $55 million, resulting in an EV/EBITDA ratio of 4.14.
Stock Price Trends
Over the past 12 months, Cadre Holdings' stock price has experienced fluctuations. The stock opened the year at $1.65, reached a high of $2.20, and currently trades at $1.48, reflecting a year-to-date decline of approximately 10.3%.
Dividend Yield and Payout Ratios
Cadre Holdings has declared dividends of $0.0875 per share, resulting in a dividend yield of 5.9% based on the current stock price. The payout ratio stands at 48.7%, indicating a balanced approach to returning value to shareholders while retaining earnings for growth.
Analyst Consensus on Stock Valuation
According to the latest analyst reports, the consensus rating for Cadre Holdings is a Hold, with a majority of analysts suggesting that the stock is fairly valued at its current price level.
| Metric | Value |
|---|---|
| P/E Ratio | 16.5 |
| P/B Ratio | 1.2 |
| EV/EBITDA Ratio | 4.14 |
| Current Stock Price | $1.48 |
| Dividend Yield | 5.9% |
| Payout Ratio | 48.7% |
| Analyst Consensus | Hold |
Key Risks Facing Cadre Holdings, Inc. (CDRE)
Key Risks Facing Cadre Holdings, Inc.
Cadre Holdings, Inc. faces several internal and external risks that can significantly impact its financial health. These risks include industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
The competitive landscape for safety equipment manufacturers is intense, with various players vying for market share. As of September 30, 2024, the company reported net sales of $109,408 thousand, down from $125,114 thousand in the same period of 2023, reflecting a 12.6% decrease primarily due to increased competition and operational disruptions .
Regulatory Changes
Changes in regulations can impose additional compliance costs. For instance, the effective tax rate for the nine months ended September 30, 2024, was 26.5%, compared to 28.3% in 2023, indicating that regulatory pressures impact profitability.
Market Conditions
The company has also been affected by adverse market conditions, particularly due to recent cybersecurity incidents that disrupted operations. The net income for the three months ended September 30, 2024, was $3,655 thousand, a decrease from $11,053 thousand in the same quarter of 2023 .
Operational Risks
Operational risks include challenges in maintaining productivity and supply chain disruptions. The company reported a decrease in gross profit margins, with gross profit as a percentage of net sales declining from 43.9% in 2023 to 40.7% in 2024 .
Financial Risks
Financial risks stem from the company’s debt levels. As of September 30, 2024, Cadre Holdings had total outstanding debt of $208.1 million, up from $140.1 million at the end of 2023 . The increase in debt financing, primarily due to acquisitions, raises concerns regarding interest expense and cash flow management.
Strategic Risks
Strategically, the company’s recent acquisitions, including ICOR Technology Inc. for $40.4 million and Alpha Safety Intermediate, LLC for $107.1 million, introduce integration risks and potential overextension . The company reported increased selling, general, and administrative expenses by 7.3% due to these acquisitions .
Mitigation Strategies
To address these risks, the company is focusing on enhancing operational efficiencies and strengthening cybersecurity measures. Additionally, the company has maintained a robust cash position, with cash and cash equivalents totaling $92.9 million as of September 30, 2024 .
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Intense competition leading to decreased sales. | Net sales decreased by $15.7 million (12.6%) |
| Regulatory Changes | Compliance costs affecting profitability. | Effective tax rate at 26.5% |
| Market Conditions | Operational disruptions from cybersecurity incidents. | Net income decreased by $7.4 million |
| Operational Risks | Challenges in maintaining productivity. | Gross profit margin declined to 40.7% |
| Financial Risks | High debt levels affecting cash flow. | Total debt of $208.1 million |
| Strategic Risks | Integration challenges from acquisitions. | Increased SG&A expenses by 7.3% |
Future Growth Prospects for Cadre Holdings, Inc. (CDRE)
Future Growth Prospects for Cadre Holdings, Inc. (CDRE)
Analysis of Key Growth Drivers
The company has identified several key growth drivers that may enhance its market position:
- Product Innovations: Recent advancements in safety equipment technology are expected to increase market demand.
- Market Expansions: The company is focusing on expanding its global footprint, particularly in Europe and Asia.
- Acquisitions: The acquisition of ICOR Technology Inc. for $40.4 million and Alpha Safety Intermediate, LLC for $107.1 million in early 2024 are pivotal for growth .
Future Revenue Growth Projections and Earnings Estimates
Revenue projections indicate a significant growth trajectory:
- For the nine months ended September 30, 2024, net sales reached $391.6 million, up from $357.9 million in the same period of 2023, reflecting a 9.4% increase .
- Adjusted EBITDA for the same period was $66.3 million, compared to $65.1 million in 2023 .
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic partnerships and initiatives are underway to bolster growth:
- Joint Ventures: Collaborations with law enforcement agencies to develop custom solutions are expected to enhance product offerings.
- Supply Chain Enhancements: Investments in supply chain improvements aim to reduce costs and improve efficiency .
Competitive Advantages That Position the Company for Growth
The company maintains several competitive advantages:
- Diverse Product Range: A comprehensive portfolio of safety products caters to various sectors including law enforcement and military.
- Strong Brand Recognition: Established brand presence in safety equipment enhances customer loyalty and trust .
- Robust Financial Health: As of September 30, 2024, total shareholders' equity stood at $300.3 million, a substantial increase from $197.2 million at the end of 2023 .
Financial Overview
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $208.1 million | $140.1 million |
| Net Income | $23.2 million | $29.0 million |
| Cash and Cash Equivalents | $93.0 million | $69.4 million |
| Net Sales | $391.6 million | $357.9 million |
| Adjusted EBITDA | $66.3 million | $65.1 million |
These factors collectively indicate a favorable outlook for future growth. The company is well-positioned to leverage its strengths and capitalize on emerging opportunities in the safety equipment market.
Cadre Holdings, Inc. (CDRE) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Cadre Holdings, Inc. (CDRE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cadre Holdings, Inc. (CDRE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cadre Holdings, Inc. (CDRE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.